Although the five-year-old company only has 15 employees, Chung said Wattpad has produced “an absolutely phenomenal amount of growth” with very little investment so far (the company raised a $3.5-million Series A round led by Union Square in September). A social-reading platform that allows amateur authors to upload content and connect directly with readers, Wattpad hosts more than five million user-generated stories in 25 languages and half a million new stories are added every month. The network has 3 million registered users, up from 1 million in September, and according to the company, those users spend 1.7 billion minutes reading and writing every month, which is more than Pinterest.

Wattpad’s approach is similar to that of some online writing communities, in which authors and readers collaborate on a work, and much of what is created is designed to be read quickly online or on a mobile device rather than being published as a conventional book or story. Fan fiction based on characters from movies and TV shows is popular, and stories often evolve over time with contributions from multiple readers and writers. As Chung describes it:

You’re able to upload a story chapter by chapter, folks are able to comment on that chapter, and they can provide encouragement to the writer and actually signal where they’d like want the story to go, which creates a type of engagement that’s impossible in an offline context. There’s a very strong parallel to the way that YouTube was able to do that for amateur or user-generated video content.

Amazon (s amzn) also allows authors to create fiction and then publish it themselves through the Kindle platform, but Chung says Wattpad’s approach is different because it focuses on the community, and the content is designed to be consumed in a different way. “This is a different kind of content designed from the ground up to be consumed in a mobile and internet environment,” he said. “I’m reading this when I’m waiting for my girlfriend who’s in the change room, or waiting for the waiter to come with my order. I would liken a Kindle e-book to watching a DVD on my computer, versus watching a YouTube video on my iPhone.”

The signals from the community of readers and writers that Wattpad has built up can also become a powerful discovery mechanism, and a way of sorting through the massive quantities of user-generated content, Chung said. Readers can see how many others have read a particular chapter or piece of a story, how many people have shared it or favorited it, and can read the comments to see how an author is interacting with his or her readers. Some young fiction writers who use the service have seen their work get more than 10 million views, Chung said — and that in turn has led to them being contacted by traditional publishers and content companies.

Some writers that spent years trying to get their work published with the standard guys out there with no success, but after building a fan base with thousands of followers and millions of people reading their stories, some of them have been discovered and publishers have signed distribution deals with them — something that also mirrors the way that YouTube has been able to discover talent.

In addition to Khosla and Yahoo co-founder Jerry Yang, the funding round also included Union Square Ventures and Golden Venture Partners of Toronto. Chung said the funds would help Wattpad hire more staff and expand its services, and also develop partnerships with existing content-publishing and distribution companies.

I wrote a book about fifteen years ago which may be just trash, a decent story or an amazing novel. But I will never know because back then the only option novel writers had was the publishing industry. Now, as an author its really hard to get a publishing deal. I have to state that I live in Mexico and write in Spanish and the only real options down here are Editorial Houses from Spain. So you have to find an editorial agent there, which is really hard, willing to check your work and if he likes it, then he has to get you a deal. To resume this… its just not going to happen. Now back to the present. I didn’t write anything else until a few months ago when I started a new novel. Once again, it can end up being trash, a decent story or an amazing novel. But this time I have more options and at least I will know what people thinks about it. Maybe just a few persons will read it or if those few persons like it, maybe a lot will end up checking it out. And I may never get a publishing deal, but at least my novel will end up be read by more than five persons which are the ones that read my first novel. For this I thank people like the founders of Wattpad, where I already uploaded the prologue and the first two chapters of my book, that gave us, novel writers, the opportunity to get our work known to the world.

Very interesting platform. I like the social fabric of WattPad. I am certain that many authors appreciate the criticisms. I know a handful of people that are trying to “publish” their book and I am going to recommend that they at least take a look at WattPad.

So I looked into these guys when they were first funded and it seems like the majority of their traffic comes from South East Asia (Vietnam in particular). It never seems to be mentioned and I wonder how that factors into their funding and chances for success.